AAA Company Worksheet December 31, 2009 Trial Balance Adjustments Adj. Trial Bal
ID: 2434528 • Letter: A
Question
AAA CompanyWorksheet
December 31, 2009
Trial Balance Adjustments Adj. Trial Balance
Dr. Cr. Dr. Cr. Dr. Cr.
Cash 112,800
Accounts Receivable 157,000
Equipment 210,000
Acc. Depr. - Equip 65,000
Notes Payable 90,000
Capital Stock 25,000
Retained Earnings 12,000
Service Revenue 372,000
Advertising Expense 14,500
Insurance Expense 14,000
Salaries Expense 53,600
Interest Expense 2,100
564,000 564,000
Instructions:
Use the account balances listed above and the information below to
prepare the annual adjusting entries necessary on December 31., 2009 in the space provided below.
In addition, prepare an income statement and classified balance sheet just below the adjusting entries.
1. The equipment has an estimated useful life of 7 years with no salvage value (straight line depreciation).
2. The $90,000 note payable was incurred on September 30, 2009. Interest only payments are due annually
at an interest rate of 10%.
3. Services performed for clients that have not been billed or recorded at December 31, 2009, $8,000.
4. On Friday, January 1, 2010, AAA paid $3,500 in wages to employees for the 5 day work week ended
January 1, 2010.
5. On November 1st, AAA paid $4,800 for the annual building insurance policy. The policy is for the
period November 1, 2009 to October 30, 2010.
6. In December a client paid a $5,000 advance for services to be performed in 2010.
Annual Adjusting Entries
1.
Depreciation Expense 30,000
Accumulated Depreciation 30,000
2.
Interest Expense 7,500
Interest Payable 7,500
3.
4.
5.
6.
Prepare an income statement and classified balance sheet below.
Explanation / Answer
Annual Adjusting Entries 1. Depreciation Expense 30,000 Accumulated Depreciation 30,000 2. Interest Expense 2,250 Interest Payable 2,250 3. Accounts receivable $8,000 Sales revenue $8,000 4. Salaries expense $2,800 Salaries payable $2,800 5. Prepaid Insurance $4,000 Insurance Expense $4,000 6. Service revenue $5,000 Advance service revenue $5,000 Account Adjusted Traial Balance Dr Cr Cash 112800 Accounts receivable 165000 Equipment 210000 Acc dep-eqip 95000 notes payable 90000 capital stock 25000 Retained earning 12000 service revenue 375000 Advertising exp 14500 Insurance exp 10000 Salaries exp 56400 Interest exp 4350 Deperciation exp 30000 Interest payable 2250 Salaries payable 2800 prepaid Insurance 4000 Adv. Service revenue 5000 607050 607050 Income statement Service revenue 375000 Less: Advertising exp 14500 Insurance exp 10000 Salaries exp 56400 Interest exp 4350 Deperciation exp 30000 Net Income 259750 Retained earnings Opening Balance 12000 Add Net Income 259750 Closing balance 271750 Balance sheet Assets Liablities Cash 112800 Interest payable 2250 Accounts receivable 165000 Salaries payable 2800 Equipment (net) 115000 Adv. Service revenue 5000 prepaid Insurance 4000 notes payable 90000 capital stock 25000 Retained earning 271750 396800 396800